Nasdaq(US:NDAQ)2025-10-21 13:02Financial Data and Key Metrics Changes - Nasdaq reported net revenue of $1.3 billion, an 11% year-over-year increase, with operating income rising 16% to $732 million and diluted EPS growing by 19% [6][24][36] - Annualized recurring revenue (ARR) grew 9% to $3 billion, marking a significant milestone [6][25] - Operating expenses were $583 million, up 5% year-over-year, leading to an operating margin of 56% and EBITDA margin of 58%, both up 2 percentage points from the previous year [24][33] Business Line Data and Key Metrics Changes - Capital Access Platforms generated revenue of $546 million, up 8%, with ARR growth of 6% [25][31] - Financial Technology delivered revenue of $457 million, up 13%, with ARR growth of 12% [28][29] - Market Services achieved net revenue of $303 million, reflecting a 13% growth driven by elevated market volumes [32] Market Data and Key Metrics Changes - Nasdaq welcomed operating companies that raised $6 billion in proceeds during the quarter, with over $14 billion raised year-to-date [10] - The index franchise recorded $91 billion in net inflows over the last 12 months, with $17 billion in the third quarter [12][26] - Nasdaq-listed securities represented 53% of total industry volume, up from 49% a year ago, indicating strong market presence [18] Company Strategy and Development Direction - Nasdaq is focused on integrating technology and AI into its solutions, enhancing its competitive position and providing value to clients [9][20] - The company aims to leverage its existing trading infrastructure to enable tokenized securities trading, reflecting a commitment to innovation in the digital asset space [20][40] - Nasdaq's strategic priorities include Integrate, Innovate, and Accelerate, with a focus on cross-selling and enhancing client engagement [19][23] Management's Comments on Operating Environment and Future Outlook - The U.S. economy remains resilient, with mixed economic signals, but overall consumer spending has picked up [8] - Nasdaq anticipates a meaningful pickup in IPO activity in the coming quarters, supported by a robust IPO pipeline [10][11] - Management expressed confidence in achieving strategic objectives and delivering sustainable growth despite a dynamic operating environment [36] Other Important Information - Nasdaq's gross leverage ratio improved to 3.1x, with a commitment to deleveraging and maintaining strong cash flow [34][36] - The company completed the sale of Nasdaq Solovis, which was deemed not a strategic fit, allowing for a more focused portfolio [15] Q&A Session Summary Question: Digital assets and growth opportunities - Management highlighted Nasdaq's long-standing involvement in the digital assets ecosystem and the relevance of its financial technology solutions as institutional interest in digital assets grows [39][40] Question: Tokenization proposal details - The tokenization initiative aims to allow investors to settle orders in a tokenized form, with collaboration with DTCC for settlement paths [44][46] Question: Operating expenses and 2026 outlook - Management indicated a consistent trajectory in operating expenses, aligned with strong revenue growth and ongoing investments in technology [52][53] Question: Financial crime management business performance - Management acknowledged variability in ARR growth due to implementation phases for new enterprise clients but expressed confidence in future growth [58][60] Question: Capital markets technology momentum - Strong demand for connectivity services and data center growth were noted as key drivers for the Capital Markets Technology business [62][64] Question: AI's impact on revenue synergy targets - Management confirmed that AI solutions are expected to accelerate cross-sell efforts and enhance client workflows, supporting revenue synergy targets [75][76] Question: BioCatch partnership implications - The partnership with BioCatch is seen as a strategic move to enhance Verafin's platform capabilities and expand its market reach [79]